OEF REVIEW:Venezuela depends on oil for about 96% of hard currency revenues. The average price for its basket of oil and refined products fell this week to US$24.38, its lowest in more than 12 years
OEF REVIEW:A potential initial public offering is under review for Saudi Arabian Oil Co., also known as Aramco, Mohammed bin Salman, the kingdom’s deputy crown prince, said in an interview with The Economist. A decision will probably be taken in the next few months, he said, without giving further details. “Personally I’m enthusiastic about this step,” Salman said. “I believe it is in the interest of the Saudi market, and it is in the interest of Aramco” by helping to promote transparency and counter corruption, he said. “This is an epochal change in the oil industry,” said Bob McNally, founder of Washington-based consultant The Rapidan Group and a former senior White House official. “Saudi Arabia is getting ready to ride the oil-price roller-coaster, not control it.”
OEF REVIEW:In a move to improve its energy security and take advantage of cheap oil, China is spending billions of dollars to build up strategic petroleum reserves (SPR) to meet up to 90 day’s worth of net import demand in case of a disruption. The country is building underground caverns capable of holding up to a quarter of its expanded strategic oil reserves by 2020, as it looks for new storage methods away from expensive and exposed above-ground tanks in crowded coastal regions.
OEF REVIEW:The oil tanker that left the Port of Corpus Christi, Texas, late last week is the bearer of the first freely traded U.S. crude in about four decades – made possible by congressional legislation that President Obama signed to end a 1970s-era ban on exports. It’s a new day indeed.
OEF REVIEW:The International Energy Agency’s Monthly Oil Report provides an overall view of the state of the international petroleum market and projections for oil supply and demand 12-18 months ahead. These are the IEA’s highlights of the current report.
OEF REVIEW:The BP Group’s Chief Economist, Spencer Dale, considers the following questions in his very enlightening paper: What should we make of the shale revolution?, How will the rebalancing of the Chinese economy affect demand?, What are the implications of the dramatic fall in oil prices over the past year or so?
OEF REVIEW:Russian president Vladimir Putin met with Saudi Defense Minister in Sochi on October 11th, while Russian Foreign Minister Sergei Lavrov was holding a meeting with his Saudi counterpart. The parties discussed Syria and agreed upon the necessity to prevent the creation of a terrorist caliphate. The levers of a hypothetical Russian-Saudi deal would be: a rise in oil prices, possibly accompanied by Saudi arms purchases, and on the Russian side, the guarantee that Assad will leave after a transition period, along with some kind of a Saudi “right of scrutiny” on Russian arms sales to Iran.
OEF REVIEW: China’s president Xi Jinping has made major pledges in foreign aid, and Africa will foreseeably benefit greatly from the new packages. Even though developing countries and the development community have welcomed the aid pledges there has been harsh criticism of them from within Chinese society.
OEF REVIEW:“Moody’s defines China’s rebalancing challenge as the need to engineer economic restructuring, policy reform, market liberalization and slower credit uptake with the aim of shifting economic growth drivers away state-led investment – all without sacrificing short-term macroeconomic stability.” “As the authorities are — we believe — prioritizing stability in the current environment, the likelihood of a slowdown in policy reform is increasing,” says Rahul Ghosh, a Moody’s Vice President and Senior Research Analyst.
OEF REVIEW:The International Energy Agency (IEA) considers that South East Asia is moving to the center of the global energy area and is a key pillar for Asia’s growth. This report covers the prospects for energy demand and fossil-fuel supply, as well as priorities for policy makers. There is a special chapter concentrating on Malaysia
OEF REVIEW:The world’s largest independent refiner, Valero Energy, which has 15 petroleum refineries with a combined throughput capacity of approximately 2.9 million barrels a day, plus 11 ethanol plants and a wind farm, presented its second quarter 2015 business update: – Earnings per share from continuing operations of $2.66 versus $1.22 in the second quarter of 2014. – Refineries operated at 96% throughput capacity utilization. – Advances made in capital investments designed to increase the company’s ability to access and process more North American crude oil.
OEF REVIEW:Prime facilities for the “Power of Siberia” gas pipeline, the world’s most expensive contract, are to be completed on schedule in 2018 and will make it possible for Russia to supply natural gas from the Irkutsk and Yakutia gas production centres to the Russian Far East and China. It will also develop gas infrastructure and boost economic growth in the eastern part of Russia.
OEF REVIEW:This Energy Information Administration (EIA) presentation for the October 2015 Oil and Money Conference covers the following questions: 1) What are the key cyclical and structural factors driving oil demand? 2) How is demand changing in developing countries? 3) To what extent will a prolonged period of low prices result in a return to higher demand growth? and 4) How is the landscape of oil trading changing with the decreasing presence of key financial institutions? Note for the article: CAFE = Corporate Average Fuel Economy.
OEF REVIEW: According to the Global Times, China, the Trans Pacific Partnership (TPP) trade agreement will not isolate China or seriously hurt the Chinese economy. Some Chinese experts explain in this article that it could be beneficial for the growth and development of the country.
OEF REVIEW: Oil and gas hedging protections for North American exploration and production companies will fall in 2016 to 11% of total production volumes leaving many companies at a high risk of financial stress. For the remainder of 2015 such companies have 28% of production hedged.
Energy ministers from the G20 affirmed their commitment to renewable energy at the first G20 Energy Ministers Meeting this October in Istanbul. This is the first time that renewable energy is on the G20 agenda.
Note that the G20 members are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK, USA, and the European Union.
OEF REVIEW: Solar installations have grown 25-30% in 2015 compared to last year, accordinbg to Mercom Capital Group’s global forecast. Global solar installation figures are illustrated from 2007 to 2015, and country-by-country forecasts are made for China, U.S., UK, India and Japan.
OEF REVIEW: According to the EIA, decreases in the cost to drill shale gas wells and continued investment in domestic production have allowed China to increase its development of shale gas. Even though shale gas is still a small proportion of the country’s overall production it could eventually help reduce natural gas imports, especially since China’s technically recoverable reserves of shale gas are the largest in the world.
OEF REVIEW:The UK Energy Statistics Report for the Second Quarter of 2015 highlights that total energy production in the UK was 10.8% higher than the same quarter of 2014, and final consumption was 2.9% higher. Total primary consumption rose 0.6% over the same period. In terms of electricity generation, gas had a share of 30.2% and coal 20.5%. Renewable electricity generation rose 51.4% compared to a year earlier, and wind generation rose 65.2%.
OEF REVIEW: The EIA Financial Review covers the following points in graphical form: Geographical distribution of oil and gas companies globally, Oil and natural gas production, Operating cash flow, Capital expenditure, Cash balances, Debt refinancing, Net hedging assets, Profitability, Debt-Equity ratios, Financial leverage, Cash flow and investment.
